Interim Report - 5 of 24 | RNS | Ticker

Interim Report - 5 of 24

RNS Announcement

RNS Number : 1993X

HSBC Holdings PLC

26 August 2015



Summary	33
Retail Banking and Wealth Management	34
Commercial Banking	35
Global Banking and Markets	36
Global Private Banking	37
Other	38

Summary

HSBC reviews operating activity on a number of bases, including by geographical region and by global business.

We present global businesses followed by geographical regions because certain strategic themes, business initiatives and trends affect more than one geographical region.

Basis of preparation

The results of global businesses are presented in accordance with the accounting policies used in the preparation of HSBC's consolidated financial statements. Our operations are closely integrated and, accordingly, the presentation of global business data includes internal allocations of certain items of income and expense. These allocations include the costs of some support services and global functions to the extent that they can be meaningfully attributed to operational business lines. While such allocations have been made on a systematic and consistent basis, they necessarily involve a degree of subjectivity. Those costs which are not allocated to global businesses are included in 'Other'.

Where relevant, income and expense amounts presented include the results of inter-segment funding as well as inter-company and inter-business line transactions. All such transactions are undertaken on arm's length terms.

The expense of the UK bank levy is included in the Europe geographical region as we regard the levy as a cost of being headquartered in the UK. For the purposes of the segmentation by global businesses, the cost of the levy is included in 'Other'.

Profit/(loss) before tax

			Half-year to
	30 June 2015		30 June 2014		31 December 2014
	$m	%	$m	%	$m	%

Retail Banking and Wealth Management⁹	3,362	24.7	3,002	24.4	2,579	40.7
Commercial Banking⁹	4,523	33.2	4,814	39.0	4,000	63.1
Global Banking and Markets	4,754	34.9	5,033	40.8	856	13.5
Global Private Banking	180	1.3	364	2.9	262	4.1
Other¹³	809	5.9	(873)	(7.1)	(1,357)	(21.4)

	13,628	100.0	12,340	100.0	6,340	100.0

Total assets¹⁴

	At
	30 June 2015		30 June 2014		31 December 2014
	$m	%	$m	%	$m	%

Retail Banking and Wealth Management⁹	497,199	19.3	526,089	19.1	500,864	19.0
Commercial Banking⁹	378,641	14.7	375,014	13.6	370,958	14.1
Global Banking and Markets	1,790,461	69.6	2,043,767	74.2	1,839,644	69.8
Global Private Banking	85,740	3.3	99,379	3.6	88,342	3.4
Other	167,946	6.5	170,802	6.2	164,537	6.2
Intra-HSBC items	(348,274)	(13.4)	(461,458)	(16.7)	(330,206)	(12.5)

	2,571,713	100.0	2,753,593	100.0	2,634,139	100.0

Risk-weighted assets

	At
	30 June 2015		30 June 2014		31 December 2014
	$bn	%	$bn	%	$bn	%

Retail Banking and Wealth Management⁹	204.6	17.2	225.4	18.1	207.2	17.0
Commercial Banking⁹	439.6	36.8	422.5	33.8	430.3	35.3
Global Banking and Markets	491.0	41.1	537.3	43.0	516.1	42.3
Global Private Banking	21.1	1.8	22.1	1.8	20.8	1.7
Other	36.9	3.1	41.3	3.3	45.4	3.7

	1,193.2	100.0	1,248.6	100.0	1,219.8	100.0

For footnotes, see page 56.

Global Banking and Markets client-facing and BSM

The GB&M client-facing and BSM businesses measure (see page 36) excludes the effects of the legacy credit portfolio and income from associates. We believe that highlighting the client-facing and BSM businesses allows GB&M management to more clearly discuss the cause of material changes from period-to-period in the ongoing businesses and to assess the factors and trends in the businesses which are expected to have a material effect in future years.

Retail Banking and Wealth Management

RBWM provides banking and wealth management services for our personal customers to help them secure their future prosperity and realise their ambitions.
	Total RBWM	US run-off portfolio	Principal RBWM¹⁶
	$m	$m	$m
Half-year to 30 June 2015

Net interest income	8,054	536	7,518
Net fee income/(expense)	3,334	(2)	3,336
Other income	1,054	46	1,008

Net operating income¹⁵	12,442	580	11,862
LICs	(934)	(47)	(887)

Net operating income	11,508	533	10,975
Total operating expenses	(8,354)	(688)	(7,666)

Operating profit/(loss)	3,154	(155)	3,309
Income from associates	208	-	208

Profit/(loss) before tax	3,362	(155)	3,517

RoRWA	3.3%	(0.6)%	4.6%

Half-year to 30 June 2014⁹

Net interest income	8,617	750	7,867
Net fee income/(expense)	3,377	(1)	3,378
Other income/(expense)	622	(149)	771

Net operating income¹⁵	12,616	600	12,016
LICs	(1,299)	(180)	(1,119)

Net operating income	11,317	420	10,897
Total operating expenses	(8,530)	(361)	(8,169)

Operating profit	2,787	59	2,728
Income from associates	215	-	215

Profit before tax	3,002	59	2,943

RoRWA	2.6%	0.2%	3.8%

Half-year to 31 December 2014⁹

Net interest income	8,513	640	7,873
Net fee income/(expense)	3,459	(3)	3,462
Other income	561	100	461

Net operating income¹⁵	12,533	737	11,796
LICs	(637)	150	(787)

Net operating income	11,896	887	11,009
Total operating expenses	(9,500)	(377)	(9,123)

Operating profit	2,396	510	1,886
Income from associates	183	-	183

Profit before tax	2,579	510	2,069

RoRWA	2.4%	1.7%	2.7%

For footnotes, see page 56.

For details of significant items, see page 53.

Principal RBWM¹⁶ performance
Management view of adjusted revenue¹⁵

	Half-year to
	30 Jun	30 Jun	31 Dec
	2015	2014	2014
	$m	$m	$m
Current accounts, savings and deposits	2,815	2,766	2,845
Wealth Management products	3,605	3,008	2,879
- investment distribution	1,966	1,635	1,666
- life insurance manufacturing	1,080	866	681
- asset management	559	507	532

Personal lending	5,101	5,222	5,210
- mortgages	1,432	1,491	1,494
- credit cards	1,995	1,992	2,037
- other personal lending	1,674	1,739	1,679

Other	321	374	395

Net operating income¹⁵	11,842	11,370	11,329

For footnotes, see page 56.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

Commercial Banking

CMB offers a full range of financial services and tailored solutions to almost three million customers ranging from small and medium-sized enterprises to publicly quoted companies in around 55 countries.
	Half-year to
		30 Jun	30 Jun	31 Dec
		2015	2014⁹	2014⁹
		$m	$m	$m

Net interest income		4,892	4,994	5,164
Net fee income		2,168	2,327	2,243
Other income		474	502	518

Net operating income¹⁵		7,534	7,823	7,925

LICs		(511)	(488)	(1,070)

Net operating income		7,023	7,335	6,855

Total operating expenses		(3,321)	(3,327)	(3,654)

Operating profit		3,702	4,008	3,201

Income from associates		821	806	799

Profit before tax		4,523	4,814	4,000

RoRWA		2.1%	2.4%	1.9%

Management view of adjusted revenue¹⁵

	Half-year to
	30 Jun	30 Jun	31 Dec
	2015	2014⁹	2014⁹
	$m	$m	$m

Global Trade and Receivables Finance	1,219	1,214	1,266
Credit and Lending	2,982	2,747	2,925
Payments and Cash Management, current accounts and savings deposits	2,262	2,184	2,287
Markets products, Insurance and Investments and Other	1,071	1,069	996

Net operating income¹⁵	7,534	7,214	7,474

For footnotes, see page 56.

For details of significant items, see page 53.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

Global Banking and Markets

GB&M provides tailored financial solutions to major government, corporate and institutional clients worldwide.
	Total GB&M	Legacy	GB&M client facing and BSM
	$m	$m	$m
Half-year to 30 June 2015

Net interest income	3,629	114	3,515
Net fee income/(expense)	1,711	(6)	1,717
Net trading income/(expense)⁶	3,743	(1)	3,744
Other income/(expense)	1,178	(10)	1,188

Net operating income¹⁵	10,261	97	10,164

LICs	11	15	(4)

Net operating income	10,272	112	10,160

Total operating expenses	(5,790)	(41)	(5,749)

Operating profit	4,482	71	4,411
			-
Income from associates	272

Profit before tax	4,754

RoRWA	1.9%	0.4%	2.0%

Half-year to 30 June 2014

Net interest income/(expense)	3,602	(19)	3,621
Net fee income	1,939	4	1,935
Net trading income⁶	2,790	51	2,739
Other income	1,460	140	1,320
		176
Net operating income¹⁵	9,791	176	9,615

LICs	(49)	217	(266)

Net operating income	9,742	393	9,349

Total operating expenses	(4,958)	(86)	(4,872)

Operating profit	4,784	307	4,477

Income from associates	249

Profit before tax	5,033

RoRWA	2.0%	1.3%	2.1%

Half-year to 31 December 2014

Net interest income/(expense)	3,420	(153)	3,573
Net fee income/(expense)	1,621	(11)	1,632
Net trading income/(expense)⁶	3,071	(106)	3,177
Other income/(expense)	(125)	92	(217)

Net operating income/ (expense)¹⁵	7,987	(178)	8,165

LICs	(316)	132	(448)

Net operating income/ (expense)	7,671	(46)	7,717

Total operating expenses	(7,070)	(622)	(6,448)

Operating profit/(loss)	601	(668)	1,269

Income from associates	255

Profit/(loss) before tax	856

RoRWA	0.3%	(2.7)%	0.6%

For footnotes, see page 56.

For details of significant items, see page 53.

Total GB&M performance
Management view of adjusted revenue¹⁵

	Half-year to
	30 Jun 2015	30 Jun 2014	31 Dec 2014
	$m	$m	$m

Markets	4,372	3,557	2,261
- Legacy credit	97	161	(177)
- Credit	492	395	138
- Rates	1,006	1,027	395
- Foreign Exchange	1,670	1,343	1,411
- Equities	1,107	631	494

Capital Financing	1,881	1,922	1,891
Payments and Cash Management	899	851	849
Securities Services	865	792	814
Global Trade and Receivables Finance	370	359	353
Balance Sheet Management	1,588	1,369	1,508
Principal Investments	128	318	182
Other¹⁷	15	18	(83)

Net operating income¹⁵	10,118	9,186	7,775

For footnotes, see page 56.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

Global Private Banking

GPB serves high net worth individuals and families with complex and international financial needs within the Group's priority markets.
	Half-year to
	30 Jun	30 Jun	31 Dec
	2015	2014	2014
	$m	$m	$m

Net interest income	454	536	458
Net fee income	527	533	523
Other income/(expense)	196	161	166

Net operating income¹⁵	1,177	1,230	1,147

LICs	(5)	(6)	14

Net operating income	1,172	1,224	1,161

Total operating expenses	(1,001)	(868)	(910)

Operating profit	171	356	251

Income from associates	9	8	11

Profit before tax	180	364	262

RoRWA	1.8%	3.3%	2.4%

Client assets¹⁸

	Half-year to
	30 Jun 2015	30 Jun 2014	31 Dec 2014
	$bn	$bn	$bn

At beginning of period	365	382	384
Net new money	(1)	(3)	-
- of which: areas targeted for growth	7	5	9

Value change	9	6	2
Exchange and other	(3)	(1)	(21)

At end of period	370	384	365

For footnotes, see page 56.

For details of significant items, see page 53.

Profit before tax ($m)

Revenue ($m)

Operating expenses ($m)

Other¹³

'Other' contains the results of HSBC's holding company and financing operations, central support and functional costs with associated recoveries, unallocated investment activities, centrally held investment companies, certain property transactions and movements in fair value of own debt.
	Half-year to
	30 Jun	30 Jun	31 Dec
	2015	2014	2014
	$m	$m	$m

Net interest expense	(397)	(221)	(280)
Net fee income/(expense)	(15)	1	(66)
Net trading income/(expense)	(123)	(120)	28
- changes in fair value of long-term debt issued and related derivatives	1,324	438	70
- changes in other financial instruments designated at fair value	(661)	(719)	710
Net income/(expense) from financial instruments designated at fair value	663	(281)	780
Other income	4,559	3,279	3,245

Net operating income	4,687	2,658	3,707

Total operating expenses	(3,879)	(3,533)	(5,068)

Operating profit/(loss)	808	(875)	(1,361)

Income from associates	1	2	4

Profit/(loss) before tax	809	(873)	(1,357)

For footnotes, see page 56.

For details of significant items, see page 53.

Profit/(loss) before tax ($m)

Revenue ($m)

Operating expenses ($m)

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR UNSSRVVAWUAR

RNS metadata

Title: Interim Report - 5 of 24
Time: 17:19:02
Date: 26 Aug 2015
Category: Results
ID: 1993X

Summary

For footnotes, see page 56.

Global Banking and Markets client-facing and BSM

Retail Banking and Wealth Management

RBWM provides banking and wealth management services for our personal customers to help them secure their future prosperity and realise their ambitions.

For footnotes, see page 56.

For footnotes, see page 56.

Commercial Banking

CMB offers a full range of financial services and tailored solutions to almost three million customers ranging from small and medium-sized enterprises to publicly quoted companies in around 55 countries.

For footnotes, see page 56.

Global Banking and Markets

GB&M provides tailored financial solutions to major government, corporate and institutional clients worldwide.

For footnotes, see page 56.

Global Private Banking

GPB serves high net worth individuals and families with complex and international financial needs within the Group's priority markets.

Other13

'Other' contains the results of HSBC's holding company and financing operations, central support and functional costs with associated recoveries, unallocated investment activities, centrally held investment companies, certain property transactions and movements in fair value of own debt.

For footnotes, see page 56.

Other¹³